TAX STRATEGIES TO MAKE A DIFFERENCE IN 2025

Your taxes won't go up this year. But you can still find new ways to decrease your burden.

- MARK J. KOHLER, CPA, ATTORNEY

Millions of Americans were in a holding pattern in 2024, waiting to make major decisions on business expansion, buying equipment, hiring, or even purchasing investment property. They were concerned about interest rates and inflation, of course, but they were also hampered by the uncertainty of the presidential election.

With a new Trump administration, we now have an answer: Republicans are expected to extend many of the provisions in the Tax Cuts and Jobs Act (TCJA), which were set to expire at the end of 2025. This includes keeping personal income tax rates the same, as well as maintaining the current standard deduction figures, bonus depreciation rules, and qualified business income deduction.

Had those not been extended, CPAs like me would have anticipated higher tax bills for our clients-and therefore advised on a range of mediocre, marginally helpful tactics. But now, I'm telling clients to operate with more certainty. We know what the economic impact was before under the Tax Cuts and Jobs Act, including the bottom-line impact on business owners' tax returns. It's now time to invest and to review our plans for expansion.

Other tax relief could also be coming from Washington in 2025. On the campaign trail, President Trump talked about reducing or eliminating taxes on Social Security, tips, and even overtime. It remains to be seen whether those bills pass, and, if they do, how businesses should adjust their spending strategies.

In the meantime, there's still plenty else that business owners can do to reduce their tax burden in 2025. Here are four strategies to talk about with your tax advisor this year.

Utilizing an S corporation to save on FICA